Appraisal myths & facts

By law, an appraiser is enforced to be state-licensed to offer appraisals for federally-related sales. You have the ability to demand a copy of the finished appraisal from your lender. Contact our professional staff if you have any concerns about the appraisal process.

Myth: Market value will be the same as the assessed value of the property.

Fact: This usually isn't true; most states do support the suggestion that the assessed value is the same as market value, but not always. Often when interior remodeling has been done and the assessor is unaware of the improvement or properties in the area have not been reassessed for a good length of time, it may vary wildly.

Myth: Depending on if the appraisal is produced for the buyer or the seller, the cost of the home will vary.

Fact: The appraiser has no vested interest in the result of the appraisal and should conduct services with independence, objectivity and impartiality - no matter for whom the appraisal is provided.

Myth: The replacement value of the home is always is on par with the market value.

Fact: The way market value is derived is based on what a home buyer would likely pay a willing seller for a property without being under pressure from any external party to buy or sell. The dollar amount necessary to reconstruct a home is what constitutes the replacement cost.

Myth: There are specific ways that real estate appraisers use to show the cost of a house, like the price per square foot.

Fact: There are many different ways that an appraiser will use to make a comprehensive analysis of every factor pertaining to the house, such as the size, location, condition, how close it is to specific facilities and the value of recently sold comparable properties.

Myth: As homes increase their worth by a specific percentage - in a strong economic state - the houses within the same neighborhood are figured to increase by the same amount.

Fact: Price appreciation of a specific home has to be concluded on a case-by-case basis, factoring in information on comparable properties and other relevant considerations. It doesn't matter if the economy is doing well or declining.

Myth: You can often find what a house is worth simply by looking at the outside.

Fact: Property value is concluded by a number of variables, including - but not limited to - area, condition, improvements, amenities, and market trends. Obviously, none of these things can be found just by inspecting the home from the outside.

Myth: Because consumers fund appraisals when applying for loans to buy or refinance their property, they own their appraisal.

Fact: Unless a lending agency releases its vestment in the report, it is legally owned by the lending company that purchased the appraisal. However, home buyers have to be supplied with a copy of the report upon written request, under the Equal Credit Opportunity Act.

Myth: Consumers need not care about what is in their appraisal so long as it satisfies the necessities of their lending institution.

Fact: Only if home buyers look over a copy of their report can they verify its accuracy and possibly need to question the result. Remember, this is probably the most expensive and important investment a consumer will ever make. An report can double as a record for the future, since it contains a great deal of data - including, but certainly not limited to the legal and physical description of the property, square footage measurements, list of comparable properties in the neighborhood, neighborhood description and a narrative of current real-estate activity and/or market trends in the area.